Walking around Georgetown on any given day presents frequent challenges to our perception of the world as a rational place (Lauinger is, without a doubt, the most egregious offender), but few are more puzzling than the continued success of Georgetown Cupcake and Sweetgreen in the Georgetown community.

Of the multitude of truly perplexing phenomena that exist in the world around us, the rise of the $3-cupcake is, perhaps, the most incomprehensible, although the existence of a $9 salad runs a close second.

Every time we walk past either of these stores, dozens of people seem to be bursting out of the storefronts, all waiting for an opportunity to spend their cash (or their parents’) on a product that they simply cannot live without.

Once one accepts the reality that people are going to spend their money on ridiculously overpriced products, another conundrum appears: How is it that a salad shop and a cupcake store (selling very different products) can be marketed to the same consumer base with overwhelming success?

The answer is really quite simple: The two products are manifestations of America’s split personality with regard to its diet. The anti-carb craze (represented by Sweetgreen) is really just a front, as those same customers reward themselves for their “healthy choices” by wolfing down products that represent the essence of carbohydrates.

The existence of a cupcake store is quite unfair to all those trying to live a healthy lifestyle. Cupcakes are a cornerstone of the American childhood, and with each bite, they bring back happy memories of the simple pleasures of life as a child. There is really nothing better than walking home after school on a cold day and being inundated with the smell of freshly baked cupcakes as you walk through the door.

Cupcakes market themselves, and the line in front of the store creates a mentality of, “Why should she get a cupcake while I work my butt off at the gym? I certainly deserve to have a cupcake more than she does.” At this point, the embittered person jumps in line and doesn’t give his or her guilty feelings about eating cupcakes another thought.

The eventual collision of cupcakes and capitalism isn’t wholly surprising, as the cupcake occupies a rich and buttery place in American history, appearing in bakeries for this first time in the mid-19th century and remaining a staple of Grandma’s kitchen ever since.

For all of those who seek to understand the success of Georgetown Cupcake and Sweetgreen, there are several key takeaways to consider:

First, if you can, try to take an idea that has been successful elsewhere and apply it for the first time in your target area. Georgetown Cupcake is a perfect example of this concept, as it capitalizes on the chic and ultra-trendy cupcake image – pioneered by the Beverly Hills-based Sprinkles Cupcake – and applies it to the Georgetown area.

Sweetgreen occupies a similar role, as its consumers love the feeling of eating a gourmet product while outwardly promoting their self-images as healthy people.

You may ask yourself what is inherently trendy about cupcakes and salads, and when you realize the answer is “nothing,” you have all the more respect for the entrepreneurship behind these businesses. The moment that you make your product the cool new trend is the moment that you become very successful in the consumer discretionary market.

Likewise, these two stores occupy an area in which their clientele is of a socioeconomic class that can afford to pay a premium for their product, allowing for an expansion of their profit margin.

arketing aside, perhaps the best quality of both businesses is that they make it a priority to have superior raw materials go into their finished product, allowing for a high degree of consistency and quality control. Both businesses are innovative in their product selection, presenting different flavors and arrangements so that their customers don’t get bored.

An interesting, although probably unintentional, aspect of these stores’ success is that both occupy a very small rental property, which allows them to pay a lower total amount of rent while creating a line that stretches out their front door. If only five people fit in the store at one time, and 15 stand outside, it creates an image that the store is doing a tremendous amount of business, even if they really only have a fairly average number of customers per hour.

Although it may seem ridiculous to pay such a high cost for cupcakes and salads, it is clear that the niche market of these stores is willing to pay that price, and therefore the businesses are operating at an efficient price point.

Hopefully, neither store will fall victim to random swings in consumer preferences, but it appears that this fate is unlikely: Sweetgreen has two new locations in Dupont Circle and Besthesda, while Georgetown Cupcake is moving to a larger and more prominent location on M street. In the meantime, we’re going to go grab chicken Caesar salads with avocado from Sweetgreen, because we just can’t help ourselves. And maybe cupcakes for dessert.

Charles Leisure is a senior in the College and the chief executive officer of Georgetown Collegiate Investors, Inc. He can be reached at leisurethehoya.com. Max Gaby is a senior in the McDonough School of Business and the chief operating officer of GCI. He can be reached at gabythehoya.com. Money Talks appears every other Tuesday.

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